In this episode, Adam and Carlton are joined by Ethan Brooks, Editor at The Hustle. Ethans talks about how newsletter funnels work, what kind of audience is required to make a living via content, and more.
Highlights from the conversation:
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Transcription generated by Otter.ai
Adam Vazquez 00:06
Today’s guest is Ethan Brooks, Editor at The Hustle. The Hustle is a media company that makes it easy for you to make smart business decisions fast. They most famously do this through their daily email that gets delivered to over 1 million people daily, their paid Trends subscription, and the popular My First Million podcast. Ethan joined to talk about the details behind building a content brand, including how newsletter funnels work, what kind of audience is required to make a living via content, and a bunch more. If you’ve ever been interested in making content creation your entire career – this episode is for you. We also got into some predictions for 2022, and what has Ethan most excited in the content world. I really enjoyed this conversation with Ethan, and think you will too. Let’s dive in with Ethan Brooks from The Hustle.
Welcome back into Content Is for Closers. We’ve got a very exciting episode this week. Carlton, thanks for joining us. How you doing this week?
Carlton Riffel 01:32
Man, we’re doing good. It’s February somehow already. I’m just really looking forward to 2/22/22, when that shows up on the calendar at 2:22 pm.
Adam Vazquez 01:46
I think that— Oh, 2:22 pm.
Carlton Riffel 01:48
I mean, it’s on a Tuesday.
Adam Vazquez 01:50
That was yesterday.
Carlton Riffel 01:51
Well, there’s two and then 22, so the 22nd, which is going to be closer when this airs.
Adam Vazquez 01:58
Yes, that’s true. How are your New Year’s resolutions going at 1/12 of the year? Or New Year’s goals maybe is a better way to say it.
Carlton Riffel 02:07
Yeah, I think maybe we’ll just stick with the two theme and I’ve maybe kept to two of them.
Adam Vazquez 02:14
Okay. Otherwise, for our internal rocks that we’ve been doing, I feel like you’ve been making progress on one or two.
Carlton Riffel 02:19
Yeah, maybe that’s why— maybe all my personal ones have gone to the garbage can because of that. No, how about you? Are you keeping to your New Year’s resolutions?
Adam Vazquez 02:30
I’m making progress on them. I’ve talked about this with several of our guests because we’re doing this 1,000-mile running thing here. I’m not where I should have been in January, but I’m already a 10th of the way through the 1,000, so I think I’ll be able to, you know, it’s only February.
Carlton Riffel 02:48
I mean, fresh starts. Anything could be a fresh start. New day, new week, new month. We just started February so yeah, get a fresh start in February.
Adam Vazquez 02:58
Yeah, speaking of fresh starts, today, we had Ethan Brooks on the show. I feel like this was a pretty fresh conversation episode comparatively to a lot of our other ones because Ethan works at The Hustle, some of you might be familiar with that, and he really brought an energy and a specificity to the conversation that not a lot of people are able to bring. He does something that is very unique. What did you think about the conversation?
Carlton Riffel 03:25
Yeah, for sure. He’s like in the thick of it. Every day he’s researching a ton of different business ideas, different content models, different ways to approach, business online. I think there are a lot of different takeaways but one thing that I specifically thought was interesting was the fact that he narrowed down different ways to think about media and different ways of packaging it. So his specific specialty is newsletters, but within that there’s almost a funnel that he references and he talks about, and so that was helpful. Then if you zoom out, even when he was talking about his job, he didn’t say it was writing content or making content, he said a large part of his job is researching. If you look at content in general, most of the time that we spend making content is actually cultivating ideas or researching or finding out different things and breaking down these models, and then it comes time to actually produce it. I think some people look at part of like, “Oh, this is a newsletter.” “This is a podcast,” but really, it’s the formation of those ideas that’s the hard part and really the thing that takes skill.
Adam Vazquez 04:39
Yeah, I thoroughly enjoyed it. I thought it was a really unique conversation, but to what you were just talking about, one of my challenges (going back to what we were talking about) is I’m trying to write for 30 minutes each day as a personal challenge and to follow some of the things that Ethan even talks about in this episode. And it is super hard because I’ll come to a part that I want to write about and I’m like, “I just don’t have enough information or enough ideas formed yet in order to do this,” so then it causes me to read, which is great, but that is so much of, your right, I think his job title is technically “writer” or something and most of what he does in the day-to-day is research, which sounds awesome. That sounds like such a fun, interesting day-to-day job. Ethan talks about all that, he talks about what it’s like to work at The Hustle, and he talks specifically about how, if you’re interested in starting a newsletter—to what you were talking about, Carlton—what that needs to look like, how many people you need to have, what your free content needs to look like, and then how you can eventually start charging for it. I think it’s a really good conversation. Let’s get into it with Ethan Brooks. Alright, we’ve got Ethan Brooks. Ethan, thanks for joining the show. Thank you for waiting through that ridiculously long, six-second intro that Riverside makes us sit through.
Ethan Brooks 06:03
At this point, it’s an honor. I listened to the episode with Sonny earlier today and you guys mentioned the six-second thing, so now I feel like it’s part of the experience, like the green room.
Adam Vazquez 06:14
We need to get Riverside on that, but it’s just this uncomfortable amount of time. Anyway, we’re very excited to have Ethan with us. Ethan is a writer at The Hustle, now a part of HubSpot, and specifically at Trends, so what does that look like? What’s the day-to-day as a writer for Trends?
Ethan Brooks 06:35
I can’t believe it’s a real job, first of all. I joke about this all the time. My big joke is I always say I’m worried Sam Parr, the founder, is going to show up at my door one day and ask for all his money back because he realizes this isn’t a real job. It’s fun. For anybody who doesn’t know, Trends is kind of a paid arm of The Hustle, a free daily tech and business newsletter. It goes out to somewhere between one and two million people a day. Trends is a slightly more specific, paid newsletter that deals exclusively with emerging business opportunities, so my job all day is to sit around and basically research emerging business opportunities, interview cool entrepreneurs, and write about how they build businesses, so it’s ridiculous.
Adam Vazquez 07:22
That’s so cool. It’s like what a lot of us do at night. Well, none of us who are nerds do that at night, but you get to do it all day long and I’m sure meet incredible people along the way.
Ethan Brooks 07:34
Yeah, it’s a blast. It basically creates situations like this so it’s a real treat to be able to do it. You talked about the business nerd thing, and that’s kind of where it came from. So Sam Parr, I mentioned, founded The Hustle and he used to, just like you said, do this on nights and weekends, just find interesting companies. I know you used to work for VaynerMedia. There’s an old breakdown that Sam did where he was trawling through all these old interviews with Gary, trying to piece together like, how fast did that company grow, how their revenue grow? He would just do this in his spare time and eventually he’s like, “You know, I think there’s something here. I think people would either pay for this or they’d like to be part of a group that kind of focuses on this,” and that’s actually where Trends came from. He just threw it out there. He’s like, “Hey, I do all this research on different businesses, is anybody interested in this?” And over the years it gave rise to Trends. So yes, it’s very nerdy, but like business nerdy. You got to have roots deep in the business nerd space.
Adam Vazquez 08:31
Yeah, it’s awesome. One more question about Trends that jumped my head. I’ve been a subscriber for a couple of years, but I deleted Facebook, so I feel like I might be missing out a part of it. There’s a pretty good Facebook group component to it as well, right? Meeting other folks who are involved in stuff like that.
Ethan Brooks 08:47
Yes, and we catch Hell for this all the time, man because a lot of people are off Facebook, and I get it because I was too, but yeah, there’s this crazy group. We say all the time, people come for the newsletter, but they stay for the community. I don’t want to oversell it, but it’s a cool group of really cool entrepreneurs. You can probably speak to it maybe a little bit different.
Adam Vazquez 09:13
No, yeah, it was a great experience. I would say if you like My First Million, which who doesn’t? It’s like the Facebook group version of that. It’s that happening on a regular basis and Trends is like the less off-the-cuff, more scientific, and actually researched version of it as well, I would say if I put a thing on it, so yeah, very, very cool. Love that you were willing to spend time with us and join us. And so we kind of got connected because you heard some of the stuff that we talked about with Preston Holland, who is with Flying Magazine and also kind of connected to Craig Fuller FreightWaves. Part of what makes all of them so interesting is they’re using all these new media forms for some other industries maybe that aren’t as interesting or people hadn’t paid attention to for a long time. Along with that trend, I would say there’s another one that everyone has a newsletter. Everybody’s found a way to make whatever they do interesting enough to be able to have a regular newsletter, and this is something that you’ve written about extensively so I want to ask you kind of two parts to it. The first is, you’ve broken down the operating models for newsletters. How should people be thinking of that if they’re thinking about starting a newsletter or they have a newsletter? How do you break that down specifically?
Ethan Brooks 10:38
Yeah, great question, man. So I think at the highest level— I guess, maybe just to give some people a little bit of context: A couple of years ago, we noticed what you were saying which is newsletters as a business were becoming more and more popular. The Hustle had been doing it for probably five to six years, somewhere in there, but in the last year, or 2020 specifically, you just saw all these acquisitions and companies like Substack were taking off, lots of sort of mainstream journalists were leaving mainstream publications to start their own paid newsletters, so we just noticed there was a lot of interest. We actually set out to write the definitive guide on how that industry works. I was lucky to be kind of the lead researcher on that project. We spent six months interviewing people from all over the industry, not just our team but also first hires at Morning Brew and people who were running different departments and WaPo, the founders of Substack, like all over the place, and really broke down, what are the nuts and bolts of how this works? So with that as background, or actually, I should probably just cap that off and say, and then we were acquired and we didn’t have to end up publishing this guide. Most of it hasn’t seen the light of day except for those Twitter threads. But at the highest level, I think there are two ways to look at newsletters. The first is as like a marketing medium, which is traditionally what people are more used to. So you build an email list and you use that to sell products. The second, which is what we’re kind of talking about here, is this new age where the email itself is the product. That’s what we can dive into deeper and break down what the business model for that looks like, but at the highest level, I think people need to start by making that distinction between whether, if they’re going to build an email list, are you using the list as (1) a means of marketing something else? Or (2) is it the product itself? The reason that’s important is because—as we get deeper into this, we can talk about like numbers, how big your audience has to be, stuff like that—the size of the audience is going to change a lot depending on what your actual goal is. So we can get to that.
Adam Vazquez 12:56
Yeah, let’s just dive in. I think most people are pretty familiar with the marketing version of it. Correct me if I’m wrong, but that could be an audience of five. The audience is what it is. You might be on the way up building it. It’s more when it comes to making that the product, and that’s the question that we get very often from customers or folks in the space. It’s just like, how big do I need to be in order to really think about this as something significant? So when it comes to that, when it comes to building the newsletter as a product that you’re building a business around or as a part of your business, how do you start to think about that in terms of when a number is appropriate, etc?
Ethan Brooks 13:38
Definitely. So I’m going to give you two answers. One is going to feel like a cheat, but it’s the real answer, which is it depends. It always depends. I’ll give concrete numbers, too, in a minute, but the reason why it depends is that there are three different ways to make money on a newsletter as a product, and this is what we found by talking to all these different founders in the space. There are basically three ways to monetize a newsletter business: you have (1) free newsletters (which are monetized by ads or affiliate deals), you have (2) low-cost subscriptions, and you have (3) high-cost subscriptions. They basically work to form this newsletter funnel, or what we call the “newsletter engine,” where your free email is the easiest one to grow because there’s no barrier entry, so you grow that audience and you monetize it with ads. Then it also becomes distribution for paid products that you develop down the line. So you have low-cost subscriptions which are— like Trends is an example: a little bit more specific than whatever your free newsletter is and not super expensive, and then you can develop high-cost subscriptions on the back end of that. Again, to give people the high-level overview, the way the business works is you build free newsletters first, which you’re trying to monetize via ads. Because of that, the audience typically has to be a little bigger. As that grows, you have the opportunity to build these low-cost and high-cost paid products. The low costs are typically called a “front end product,” high cost is “back end.” So you have a free front end and back end and that’s how the business works. The reason it depends is because, inside of those models, there are a number of different levers you can choose. So let’s just start with free newsletters because this is where most people start. If you’re building an audience in a free newsletter and the goal there from a business standpoint is to monetize it with ads, there are basically two different types of ads: you have (1) display ads. So you’re basically saying, I’m going to go to Casper Mattress and I’ll say, “Hey, I send this newsletter to X number of people and I’ll charge you $5,000 [or whatever it is] to be in the newsletter.” That’s the first type of ad. The second type of ad is affiliate ads. I think a lot of people are probably familiar with those but you basically sign up and you get some kind of kickback for however many of their products you sell. When you’re building a free audience that you’re monetizing via ads, I find it’s helpful to break these things down as principles rather than numbers. Principles first because if you understand the principles, you can kind of choose your own path. For a free audience, there are three levers at play in terms of how you’re going to be able to monetize it and those are (1) how big is your audience? (2) How engaged with you are they? Like, are they actually taking action based on what you say? Because you can have a huge audience, but if they’re not really listening or doing anything, it doesn’t matter. And (3) how much money do they have to spend? That last one is probably the most important because you can have an enormous audience that’s incredibly active, but if they don’t have any money to spend, it’s going to impact everything else in terms of what types of products you can advertise to them, what types of paid subscriptions you can build down the line. So (1) how big is your audience? (2) How engaged are they? And (3) how much money do they have? Here’s the deal: you only really need two. When you’re looking at—and I’ll bring this full circle now—when I say it depends how big that audience has to be, this is why: if you have a small audience that’s incredibly engaged and has a lot of money to spend, it doesn’t have to be that big. But, as I said, those differ.
Adam Vazquez 17:39
Those are great questions. I really like those questions and I like the two out of three because if you, let’s just take the one you just said: the small audience, highly engaged, has a lot of money. There are multiple things within that. The marketing angle then is probably a really strong potential because if you have a service to provide, you have a really engaged audience that trusts you, and they have a ton of money to spend, BAM, there’s a ready-made audience for you to sell against. Or conversely, like you’re saying, there might be another brand that’s interested in that. So yeah, those are great.
Ethan Brooks 18:12
For sure, yeah, and then just to make it even more concrete for people in terms of numbers, to use an example like the one you’re using: I have a friend who has an incredibly niche newsletter specifically focused on people who own photo booth businesses and it’s not big. It’s somewhere around 1,000 subscribers. That newsletter generates more than six figures a year in affiliate revenue because, it’s a small audience, but everybody in the industry knows it.
Adam Vazquez 18:44
Yeah, I was going to say, are there more than 1,000 people who own those things? That’s gotta be a good size of the market share there.
Ethan Brooks 18:51
Yeah, it can’t be too many more than 1,000, and they’re buying things for their business, which makes them a little bit less cost-sensitive. So anyways, you can see how those levers can play out at different extreme ends of the scale. You can have an incredibly small audience with a lot of money to spend and, as long as you’re reaching them with the right products, you can make a great living on that. We may talk about this a little later, I actually think that’s where a lot of the opportunity still lies in newsletters, these really niche followings. On the other end of the scale, you have people like Morning Brew and The Hustle and things like The Skim, these huge audiences who have relatively high income, relatively active, very hard to compete against them these days, though. There are people who are making a go at it, but again, I think the most successful opportunity in that space is either super niche or like you need some kind of angle, but what does that look like in terms of—
Adam Vazquez 19:43
Let me just ask you, sorry, one more question on that. Let’s say you have a mixture, like I feel like there are some of these legacy lists. People have random lists from before GDPR or whatever and so they have these massive lists that they’ve maybe accumulated over 10, 15, 20 years, and the engagement might not be extremely high based on a number of factors (where they got it, how often they’ve used it, etc.), but it could be a list of high net worth individuals or businesses and it’s huge. What’s a play for those types of people where your engagement might not be there? Because isn’t engagement key for something like this?
Ethan Brooks 20:23
Yeah, so it’s one of the three levers. The example you just gave was it could be a huge list of high-net-worth people that aren’t super engaged. Under the framework, that’s still probably quite valuable because you have two of those three things: (1) a large list, (2) lots of money to spend. You probably could start marketing to that list immediately and see where it goes. Now, that being said, to dive into the specifics, I’ve seen stories of people who have tried to warm up lists like that by only marketing to small segments of them at a time and the reason for that—this might be a little too specific, but I’ll get into it for a second—is, in addition to the size of your audience and stuff, these email servers are paying attention to how many of your recipients actually open the email. How many are marking you as spam, etc. So if you have a really disengaged audience that you’re trying to start a business around, it can be a good idea to market to segments of them first so the statistics work in your favor, you’re not seeing incredibly low engagement rates, and then you just warm them up over time. To that example, I think that could work. Generally speaking, though, I think people have— The same question comes up all the time, there are kind of two things: one is, how niche too niche? The other is, how big does my audience need to be before I can start selling ads? The framework we just talked about is a good one for thinking through this. At a general level, though, when you break down the standard CPMs for ads in this industry, if you’re looking for a super simple number, for a general-purpose for an email that you want to make six figures on in ads, you need to be swinging 50-100,000 subscribers minimum. Earlier than that, there are probably better ways to make money than via display advertising. One option would be that affiliate advertising, as I mentioned, that’s kind of the two sides of the ad coin. The beauty of affiliates is that a lot of times those programs are self-serve, so you don’t necessarily have to sell somebody on it. Also, they’re entirely performance-based, so most companies don’t care how big your audience is. It’s like, “If you can land us sales, we’ll pay you. You could have two people on your email list, I don’t care.” So affiliate sales are often the best place to start.
Adam Vazquez 22:53
Just to break that down for maybe people who— because I feel like those are a little bit old school, and I love that you’re bringing those up, but maybe some folks haven’t experienced that. Back in the day especially, you would jump on whoever (Amazon, any web retailer, really), grab their affiliate code, and then really, for the most part, it was on your site. So if you had a content site or something like that, you could throw the code on there and as your audience would come and interact with your site, interact with your content, if they clicked on the ad and bought anything from the affiliate, you would receive a piece of that. That’s essentially how it would work in your email newsletter as well. Is that kind of right, basically?
Ethan Brooks 23:35
Yeah, effectively, and there are a few good resources to look at for people who are interested in this. So you mentioned one, which is Amazon. Amazon’s probably the most famous at this point, but there are some huge publications that make lots of money on affiliate deals. So one, most people are probably familiar with NerdWallet. For anybody who’s listening and hasn’t heard of them, they basically have a bunch of content around how to choose a credit card and they do affiliate deals for these credit card companies. Well, NerdWallet did $245 million in affiliate revenue last year. It’s insane, so affiliate can be a huge business, especially if you’re smart with your content play. A couple of places to check out: one of the leaders over at The Motley Fool gave us a couple of tips on this. Rakuten, which is an affiliate network. R-A-K-U-T-U-N. That’s one place where you can find high-quality affiliate deals. Another is ShareASale. It’s another great place to find high-quality deals, because there are plenty of affiliate networks out there that are low quality, too, so you want to steer clear of those. So those are two to take a look at if you’re interested in casting a broader net and seeing what else might be available to you.
Adam Vazquez 23:55
Oh, yeah. That’s great. We’ll link all three of those in the show notes below. I think that those are some great tidbits on the newsletter front. If we had to flip it for a second to more broadly this creator economy, which has been a buzzword for a while. There are positives, there are negatives. I think it’s cooled off a little bit, but especially marketing folks tend to be very attracted to this because it’s like, “Oh, finally! This is the stuff that we do. There’s an economy around it.” So similar question: You’ve done a lot of work around how the solo or micro-creator career can happen. Maybe just give us a little bit of an idea of how people should be thinking about that and then again, do you need to have a million followers on Instagram in order to make that a reality? How does that work?
Ethan Brooks 25:49
Yeah, sure. The great news about the newsletter research is that that model that we were talking about a minute ago of free front end/back end, that actually applies pretty much universally across this creator economy. It’s kind of a useful way of thinking about all this. As I mentioned, you have your free audience (which you’re building). We talked about that in terms of a newsletter, but that could be your Twitter audience. It could be your TikTok audience or something like that. It’s better if it’s email, because you own it, but the reality is you’re just trying to develop this group of people who are paying attention to you and taking action. Then I mentioned low cost and high cost paid subscriptions, but that’s not necessarily limited to newsletter work. That could be a paid community, it could be a paid course. If you learn to think in terms of this model rather than one product type, it’s actually beneficial because it’ll help people continue to adapt as these new distribution methods come out. The good news is that same model can be applied, and I think a lot of the same rules apply. No, you don’t need an enormous audience as long as you have two of those three levers. Tim Stoddard and I broke this down recently. There’s kind of a trajectory that we see people following again and again and again in this creator space and it goes something like these three steps: The first is cash flow, which is basically how are you going to pay the bills while you build this creator or content style business? If you’re a marketer inside an existing business, this is still important. What are you going to do to pay everyone’s paycheck day-to-day as you build the influence that you need to be seen as a voice in your space? So cash flow first. Then you have that trust and influence phase where you’re building your audience and showing people that you know what you’re talking about and that they can trust you for recommendations and stuff like that. Then the third stages, products. Again, this could be paid subscriptions, it could be courses, it could be communities. One thing I just want to point out about these for anybody who’s thinking about this from a business standpoint is that the benefit of a paid product is not just that it makes money, specifically when you’re comparing something like a free newsletter versus a paid newsletter. The big difference between those is actually that the paid newsletter makes recurring revenue and that’s important because selling ads can be a pain. Like, if you sell a million dollars worth of ads this year, that’s great, but you got to go do it all over again next year, more if you want to grow. If you have a paid newsletter, though, sell a million dollars worth of subscriptions, if half of those people stick around for a second year, you start the year with 500 grand in the bank. Then if you sell another million, if your capacity to sell doesn’t grow at all, the business is still grown by 50%. So this concept of recurring revenue is really important and it carries over to these different maker models. So yes, absolutely: transitions; no, you don’t need a huge audience; and that’s kind of how you think about it: cash flow first, trusted influence, and then products on the tail end.
Adam Vazquez 29:16
Yeah, I really like that framework. I love the trust and influence part. I think that’s probably the one that— I think cash flow is a little bit obvious, or people naturally think, “How am I going to pay the bills? What am I going to do?” But especially for the folks who are in an organization, it can be easy to be like, “We’re okay. We’re making money. Our organization is making money,” or whatever, and so, “Okay, let’s start like figuring out how to make products,” and that key middle piece gets left out so much of the time. It’s probably fairly obvious, but what are some of the—just quickly—some of the, if you have any good examples of people who have really built that trust and influence well or just how that can be done. I don’t mean to put you on the spot, but just curious where you’ve seen that done.
Ethan Brooks 30:03
Yeah, sure. Are you more interested in a brand or an individual creator?
Adam Vazquez 30:07
Either one. I just think it’d be helpful to hear from you when it’s worked.
Ethan Brooks 30:14
Yeah, sure. On the individual creator side, one of my colleagues, Steph Smith is actually one of the people that I admire the most out. She’s done a great job of doing this and what’s interesting about Steph, for anybody who’s listening to this, is that she’s always had a job. There’s this temptation in our industry, this entrepreneurial space, to strike out on your own immediately and build your own thing and it’s helpful to know that you can do this with a job. In fact, the job is that cashflow component upfront. It can be really, really helpful. So Steph’s done an incredible job of this.
Adam Vazquez 30:54
Yeah, that’s a great example.
Ethan Brooks 30:57
Yeah, and there are others, too, like James Altucher is a really interesting case study in this model. In fact, he’s one of the guys who helped us really crack this. He’s very generous with his time and insight. His newsletter is doing something north of $20 million dollars a year, just his newsletter business alone. It’s really interesting. For people who haven’t heard of him, he’s got one free newsletter that’s monetizing by affiliate deals. Then he’s got two or three front-end newsletters that are somewhere between one and $400 a year. By the way, in terms of the price point on those, the idea is to price them right in that zone, the 50 to two or $300 a year. It’s kind of an impulse buy, not a super huge payment. Then he’s got these back-end newsletters that are like $5,000 and up. I’ll give you a third example, which is kind of related. So Altucher’s business sits underneath the umbrella of Agora publishing. Are you familiar with them?
Adam Vazquez 32:00
Only James. I didn’t realize he was a part of something else.
Ethan Brooks 32:04
Yeah, that’s actually common. Agora’s got to be doing more than a billion dollars a year in content sales but it’s really interesting because you would almost never know you were buying from them. They’ve done a very good job of creating this umbrella of smaller imprints that all have their own individual creators and stuff and they catch a lot of heat for two reasons. One, their content is kind of on the far right end of the spectrum. It elicits an emotional response from anybody who reads it. The other reason I think they catch a lot of flack is because—and this is sort of related—they write killer copy. Their whole funnel is incredibly well-tuned. Whether you like them or not, I think you can learn a lot from that company in how they’ve set things up because it’s a super well-oiled machine. Now, they definitely have some shady sales tactics and need to be held accountable for that but, in terms of how the business model works, they’re a really good example of somebody who’s making this model work at an incredible scale for somebody that most people have never heard of.
Adam Vazquez 33:15
Oh, very cool. I’m excited. I’ve never heard of them personally so I’m excited to dive into them myself.
Ethan Brooks 33:21
Yeah, check them out.
Adam Vazquez 33:21
That’s awesome. Those are great frameworks and ideas for people to latch on to so appreciate you sharing those. I want to get a little bit more on you. Again, what you’re doing is so interesting, you have all these models. How did you get into this? Let me ask you this: when you were 12 in Connecticut or whatever and you were watching sports, were you’re like, “One day I’m gonna study businesses for a living.” Was that the goal? Were you a Darren Rovell fan or something like that back in the day? I, um, whose Darren Rovell? Maybe that will help with part of it. Well, that answers the question. He’s like the OG Joe Pompliano. He’s probably the new Rovell if you know Joe.
Ethan Brooks 34:04
Oh, alright, I’ll have to check him out. I would say a large part of it was luck but, from a very early age, it was something that I wanted to do. I had no idea how to get there. I really lucked into this path, but I’ve always been a little bit entrepreneurial and dabbled in business. I actually started my career as a freelancer. I did freelance web dev for the first five or seven years of my career.
Adam Vazquez 34:30
Same amount of time.
Ethan Brooks 34:31
Yeah, so I’ve always kind of been in this startup area. Then a couple of years ago, I was doing basically developer relations work at a hypergrowth startup called Top Towel. It was a really cool team, really cool project, but my grandfather passed away and I realized that I always wanted to be a writer and I wasn’t making progress towards it. It was just one of those moments where I was like, “I gotta change something.” I left that job without really any plan on how to get here, I just kind of knew at that time, like, this is an important time to do something. I hacked together a living for like nine months, still just freelancing again, and it was Steph actually who reached out to me. We worked together at Top Towel and she had gone from there straight to The Hustle and they were hiring for a writer jobs. It was kind of this crazy story of how you never really know where that life-changing opportunity is going to come from. I’ve tried to figure out how I’d replicate it and I honestly can’t. I just got really, really lucky. That’s the high-level story.
Adam Vazquez 35:42
I’ll have to, some time off-air, share how we have some very similar parts of our story, but the people listening to this are tired of hearing about my story so I’ll have to share that some other time. Last couple of questions here, and really appreciate you spending the time Ethan. First is just like, what’s got you excited? You work for Trends. What are some of the trends? What are some of the content, ideas, etc, that have you excited as we’re now partway through the new year here?
Ethan Brooks 36:10
Yeah, can I give you two? I’ll give you two content-related trends. One is one that I’m excited about and the other one is one that I think is being overhyped. The reason I want to share them is because I think they’re both maybe a little counterintuitive. So the one that I’m super excited about is magazines. I actually think magazines are coming back. I publicly predicted this year. I think this is going to be the year of the magazine and two years from now everyone will be starting them. Everybody here who’s listening, if you haven’t heard the episode with Preston yet, you gotta go back and listen to it. What they’re doing over at Fly Magazine is fantastic. Long story short, there is a major inefficiency in the magazine market that entrepreneurs are uniquely suited to solve. When they start figuring it out, specifically eCom owners, everyone is going to be buying magazines. In fact, I interviewed Preston recently and the quote that he left me with was, if you’re running one of these businesses, whether it’s an eCommerce business or something like that, and you’re not thinking of buying a magazine, you’re leaving money on the table. So I’m really excited about magazines. I think they’re coming back. Also, weirdly enough, I don’t know if you have seen this. We wrote about this at The Hustle: vinyl had its best year last year in a long, long time. Same thing with print books and, get this, direct mail. Direct mail is now more effective than ever before, in part because no one’s using it anymore, and here’s a weird thing: for people in the U.S, one of the leaders in direct mail innovation is actually the U.S. Postal Service. They have this crazy site called Irresistible Mail. They’re deep in the VR space. This old, outdated, government bureaucratic system is crazy innovative on the direct mail campaign. I encourage marketers to check it out. That’s actually happening overseas, too. So that’s what I’m excited about.
Adam Vazquez 38:13
Can I just say, so all of those things I would say the common thing is their analog, but I would imagine you’re implying they have to be incredibly high-end? Like, the magazine is a tabletop book or something, or the direct mail is not a flyer from a dealer that’s on nasty paper. That’s kind of what you’re implying in the fact that it’s going to come back? Or maybe not.
Ethan Brooks 38:37
To some extent. To tie this in with what we’ve talked about, when you look at magazines specifically, there are a few different ways that they make money. One is subscriptions, one is ads, and then there’s kind of this third thing similar to email which is you can use them to promote other products. In the case of Fly Magazine, and he’s been public about this. Preston and Craig have this magazine focused on pilots and they’re now also building this entire real estate development with fly-in properties, which is awesome. They literally own the most trusted outlet for flying news in the world, probably, so it’s this huge marketing lever. To your point, they are making it an incredibly high-end experience, and I do think there’s something to that but generally speaking, I think the other reasons that magazines have a lot of potential right now is, one, among the people who still read them, there’s a lot of trust built there, and this is what Craig and Preston found. Initially, they had thought of shutting down the magazine when they bought the brand, but they just found, like, this thing’s been around for almost 100 years, tons of people love it, it would be crazy to walk away from that. So if you can find a brand that people have loved for a long time, I think there’s a lot of value there. Also, there are all these new tie-ins, and this relates to direct mail as well. So like voice integration, which I never thought of. You can now place ads in a magazine with an Alexa command printed on the page, so somebody is flipping through it, and it says, “Hey, you want to buy this new keto wine? Just say, ‘Siri, give me dry farms.’”
Adam Vazquez 40:22
Oh, that is cool.
Ethan Brooks 40:24
Right? So now there are different ways to make the ads more effective and then also to track that effectiveness much more reliably than old magazines. So I think magazines are gonna be able to monetize at a higher rate than they used to be able to. So I think there’s a lot there and, yes, part of it is is definitely that reader experience if you can take that up a notch. Can I ask you a question?
Adam Vazquez 40:48
Ethan Brooks 40:49
Do you subscribe to any magazines?
Adam Vazquez 40:51
I have a GM truck so they send me this magazine every month. It’s called Boundless and it’s cool. I don’t know that I would pay for it. It’s beautifully done and everything like that, but no, I don’t have any magazine subscriptions aside from that. I’m a laggard. I need to get on the ball.
Ethan Brooks 41:14
Well actually, that’s interesting because it actually does kind of beg the question: if you don’t have a magazine subscription, is that because you’re a laggard? Or because you’re digital-first and you’re at the leading edge? I was the same way until literally three months ago and I’ll tell you, this is what changed my mind, too: I was just really overwhelmed with all the digital content, and I live in this world. I was just looking for something high quality that I can read without staring at a screen for more hours of the day, so I recently signed up for Wired and I’m going to add— I think I actually also signed up for NatGeo, but that was the moment for me where I was like, “Yeah, I think there’s actually something here. People want something physical.” So that’s the one that I’m excited about.
Adam Vazquez 42:01
Alright, return of the mag. You heard it here first from Ethan. Man, I apologize, I cut you off there. What was your second idea? Or second that you were really excited about?
Ethan Brooks 42:10
Oh, so this is the one that I think is maybe a little overhyped, and marketers are either gonna love this or hate this, but SMS marketing. I think— What do you think about it? What are your thoughts?
Adam Vazquez 42:25
We had a guest (on shout-out Kenneth Burke) who runs Text Request, so I’m pro it for what he does and I think they have a great brand but as a consumer, again, I’m being consistent. I’m just a curmudgeon. As a consumer, I opt out whenever possible from text marketing, I’ll say that.
Ethan Brooks 42:46
I think I have a similar outlook, which is I think text marketing can be incredibly effective and there are some great tools out there. I haven’t heard of the one that you just mentioned. I have nothing against the platforms that are joining in this space, but I don’t think most companies are prepared to really make this work. Again, this only comes from my sort of wizard brain reaction as a consumer. I hate when people text me and I didn’t ask for it. I’ve got a couple of brands that are doing this now and it makes me loathe them with a fiery passion. Here’s who I feel could really capitalize on this: I think small creators have a huge opportunity there. If you’re the kind of person who’s building this one-to-one relationship and you’re willing to put the effort in to be incredibly personable, it’s gotta be very personable.
Adam Vazquez 43:45
Gary Vee is the case for this, right? He’s in there texting all hours of the day, etc. I would also say Apple could flip this on its head, it would be an enormous opportunity if they allowed the simplest bit of organization within texting. Texting is such a wild west that I’m like you where I hate, I mean, I have 98 unread texts right now and it’ll just always sit there. You know what I mean? Like 50 is the minimum because it’s just a mess. I can’t mark unread, I can’t file, and so I totally agree with you that unless something significant happens in the infrastructure on the platform level there, I think it’s probably a little bit overhyped as well.
Ethan Brooks 44:27
Yeah, so we’ll see. We’ll see. I’m curious to see where those things go.
Adam Vazquez 44:31
Yeah, I love that. Well, Ethan, thank you so much for spending your time with us. Thanks for jumping on the show. Where can folks— It seems like you’re doing a pretty recurring podcast, so where can folks find you or follow you and keep up with what you’re working on?
Ethan Brooks 44:45
Yeah, so I think people should check out— Well, you can find me on Twitter. I’m @damn_Ethan, damn underscore Ethan on Twitter
Adam Vazquez 44:53
It’s in the show notes as well.
Ethan Brooks 44:56
And you can check us out at trends.co, or thehustle.co if you want to catch the newsletter. I appreciate the time, man. I’m really enjoying going back to the archives of this show, so it’s a real pleasure to be on it.
Adam Vazquez 45:09
Cool. Thanks for coming on, man.
Ethan Brooks 45:10
Carlton Riffel 45:11
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