Market Mix - 🚀 Letter Meta (by Letter Operators)

Hey there 👋,

In this launch issue of Letter Meta, behind the scenes of newsletter businesses, I discuss:

Cheers!

Richard Patey - @richardpatey

Take Me To The Beach

Letter Operators is my productized newsletter agency.

Previously I had a $5K/m package (now at this page) where I’m launching and running newsletters for people on beehiiv. I took on a great first client (40K subs) in the startups niche and have been in discussion with leads, but going forward I’m going to be strict with who else I take on, and instead will refer leads to other newsletter agencies.

That’s because my focus for the next three months is on winning the beehiiv beach club leaderboard and being sent somewhere tropical:

I’m running a no-brainer offer of just $199 for full beehiiv setup plus a copy of my bestselling product The Newsletter Is The Business, which has been bought over 100 times:

I had the idea of offering a done-for-you service when Tyler Denk, the co-founder and CEO of beehiiv, first launched the leaderboard, which was inspired by previous affiliate leaderboard competitions I’ve done well in (such as Samcart and Clickfunnels):

And now that I’m an investor in the company, I have all the motivation I need to get 100+ new customers on the platform within the next 3 months, and win the leaderboard!

Why I'm so bullish on newsletter businesses...

I feel that newsletter businesses are where websites were back in 2011, i.e. multiples low and few people know how to value them.

But over time they will become far more highly valued than content sites dependent on SEO, and that the number of newsletters businesses will start to compete with the number of websites we see on existing digital asset marketplaces.

I recently posted about how it makes sense for anyone with an existing 10K+ list to launch an independent media asset:

But after having a call with a Letter Operators lead, the math becomes an absolute no-brainer when you have a 50K+ list.

If we assume a 50% open rate (what you should be at least aiming for in these apple mail auto open times) then you have 25K people opening each send.

If your audience is capable and valued, getting a $50 CPM for sponsorship is reasonable (even though it's got a lot tougher recently with CPMs squeezed).

That means that if you only have one ad unit (you should have multiple) you'll be making $1,250 per weekly send or $5K/m.

Add on affiliate revenue, and revenue from promoting other people's newsletters using beehiiv boosts, and very quickly you have a six figure revenue business.

But the best part for me is that there is an audience valuation floor set by the CPA that you or your counterparts are bidding to acquire subscribers.

If you can buy a subscriber for $2 and 50% churn (high) so it costs you $3 to get an open (at 50% OR) then you immediately have an asset value of $75K before making any money.

Combine that with a multiple of the revenue and within 12 months it's not unreasonable to think you'll be at $250K-$500K in asset value.

Keep growing by funnelling website traffic and diverting some of your marketing budget to paid acquisition for the media asset (as it can promote your business for free as a 'sponsor') and you could get to a 7 figure exit within a few years:

LETTER SHOUTOUT

Disclaimer: Not financial or business advice. This newsletter is strictly for information and education purposes. There are affiliate links to beehiiv in this issue.