Hello there! This is the latest edition of my Q&A series where readers ask me questions and I do my best to answer them.

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Ok, let’s jump into it…

The optimal time for launching a paid newsletter

The first question comes from Bob Lalasz:

What is/are the indicator/indicators a solo creator should look at for signals they might be able to start a paid list alongside their free list?

This is a question I get from a lot of writers. Most understand that they shouldn’t launch a free and paid newsletter simultaneously but don’t know how much runway should be given to the free version before they launch a paywall. Should they simply wait a set period of time – like, say, six to 12 months – or do they need to meet some minimum threshold of free subscribers?

In many ways, this is just a simple math problem. Based on anecdotal claims I’ve heard from creators, marketers, and platform executives, a newsletter is likely to convert anywhere between 5% and 10% of its free list into paying subscribers. So if your goal is to reach 1,000 paying subscribers, then you should probably aim to hit 20,000 free signups.

Does that mean you need to reach 20,000 free signups before you launch your paid newsletter? Absolutely not. Most writers try to build up both audiences simultaneously. But it does mean that the closer you are to that 20,000 signup threshold, the quicker that you’ll hit your subscriber goals.

Let’s say you currently have 10,000 free signups to your newsletter and you want to launch a paid version that gets up to 1,000 paid subscribers within two years. That means you would need to grow your free list by approximately 100 net new signups every single week over that two-year period.

Keep in mind that your paid newsletter won’t help you grow your free list. So if you’re publishing four free newsletters per week and then start locking two of those newsletters behind a paywall, then you should expect your growth rate to be cut in half. 

Why WhereByUs didn’t scale to more cities

This question comes from an anonymous subscriber:

Why didn't WhereByUs keep scaling to more cities? They said they were going to and then didn't. They used to be a media startup darling.

First let’s start with some context: WhereByUs is a media company that focuses on launching daily newsletters in different cities. Its formula is straightforward and repeatable: it hires two editors for each newsletter and monetizes it through a mixture of native advertising and paid memberships. It now operates newsletters in five cities: Miami, Seattle, Portland, Orlando, and Pittsburgh. It also launched a SaaS product called Letterhead, which licenses its newsletter technology to outside media companies. You can check out an interview I conducted with founder Christopher Sopher over here. 

For this question, I actually reached out to Sopher over email. Here’s his response:

I can't speak to being a media darling or not since we both can't control that and haven't been focused on it, but: we've been busy launching a new software business (Letterhead) alongside our existing network. COVID's a big part of the picture, too, but that's a lame answer.

Our most recent new brand was in 2019, when we acquired The Incline in Pittsburgh, which brought our total to five. We decided to spend that year focused on revenue growth, so we could support further expansion. It was a $3MM annual business right before COVID. That was a sudden change to our revenue streams which threw off the expansion timeline (no events, shifts in who purchased advertising, tripled member revenue), but it also prompted us to dig into this opportunity we'd been considering for a while: helping other folks do the kind of high-engagement newsletters we do, and do them efficiently, profitably, and with useful data about the community you're building, through software. Our question was, how can we have the biggest impact the most quickly? Can we support other folks instead of only focusing on our own brands? We have always had publishers coming to us asking, "Hey, y'all are okay at newsletters, how do you do it, can you help us level up there?" 

We'd built internal software for ourselves because we couldn't make it work with existing stuff off the shelf; we were using Mailchimp and Google Sheets and a lot of manual brute force, and that just didn't scale because the existing email marketing software is not built for publishers or for community-building; it's sort of all about traditional "blasts" and ecommerce. That's where Letterhead came from. We started developing that in mid-2020, brought the first customers aboard in October, and have been growing since. I think we're up to 140-some newsletters now, everyone from small folks just getting started to larger publishers like Salon and partners like TinyNews.

So a lot of our energy and resources went into standing up this new business line, while we restructured our owned and operated brands to a less in-person strategy. We also have a new expansion strategy on the WhereBy.Us side launching early next year that I can't wait to share when we're ready. But for the moment I have to leave that unhelpfully vague. 

Is Axios Local actually successful?

This question is from Chris Schroder:

Is the Axios experiment with local newsletters succeeding? Making a profit? Or will it go the way of Patch, passed through the hands of different owners eventually dwindling?

Let’s start with some quick context: Axios is the media company launched by two former Politico founders that publishes newsletters across a variety of industries that include tech, business, healthcare, and politics. It’s since expanded into local news, starting with the acquisition of a Charlotte newsletter. In its first year, it launched 14 city-based newsletters and recently announced 11 more. 

Its model is pretty simple: It hires between two and three editors in each city, and they produce a daily morning newsletter with about five news items per issue. Both the tech and sales teams are centralized, and the newsletters are monetized through native ads from a mix of national and local brands. The newsletters collectively amassed 500,000 signups and generated $5 million in their first year. Axios projects that they’ll hit $10 million in their second year.

So is the model “succeeding”? With the obvious caveat that I don’t have access to any metrics that haven’t been publicly shared, I’d say I’m pretty bullish on Axios Local.

I suspect there are a lot of people like me: we feel guilty that we don’t consume more local news, but we just don’t have the patience to wade through the boring minutiae of long articles about city council meetings and education policies. The allure of newsletter publishers like Axios, 6AM City, and WhereByUs is that they produce a news product that allows you to quickly alleviate that guilt in a matter of minutes and get on with your day. You spend 10 minutes in the morning eating your local news vegetables and then move on to less nutritional content. Since subscribing to the Axios DC newsletter, I’ve read considerably more local news than I otherwise would have by clicking on links in social media.

Some have suggested that just two or three reporters can’t cover very much local news. Those people don’t know what they’re talking about. I got my career start in local journalism and worked at a print newspaper with just three full-time reporters. Between the three of us we managed to attend every major government meeting and cover the spread of business, education, and lifestyle news. I would never suggest that two reporters could replace the work of a robust metro newsroom that employs hundreds of journalists, but I do think these newsletters provide a lot of additive value that goes beyond mere curation.

With media companies increasingly relying on first party data to target ads, Axios is particularly well positioned, in that it operates both local and national newsletters, the latter of which are separated by industry. I subscribe to both the media and DC newsletters, for instance, meaning that, at minimum, Axios knows the city I live in and the industry I work in. This gives Axios a distinct advantage over most local and national publishers.

One last thing: you mention the local news company Patch and suggest that it’s on the wane. The most recent reporting I’ve seen is that Patch is profitable and growing its head count, though it’s been at least a year since it’s provided any updates on its growth.

Did I not answer your question yet?

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Quick hits

After acquiring Group Nine, Vox Media will now have 2,000 employees and generate $700 million in revenue. It's probably leading the pack among its digital cohort in terms of scale. [Axios] FLASHBACK: I wrote recently about the massive amount of consolidation afoot in digital media.

"[Graydon Carter] said [Air Mail] now has 130,000 readers, which includes paid subscribers and people who have a trial subscription." [Axios] That seems impressive for an upstart that's only existed for a few years.

Richard Rushfield’s The Ankler, which is Substack’s third biggest business newsletter, is expanding into a full-fledged media company. [NYT] This is an interesting move. I had Rushfield on my podcast earlier this year and he didn't seem to have any ambitions beyond making a comfortable living from his newsletter.

We're experiencing a revolution in short documentary filmmaking as the economics of filming, producing, and monetizing documentaries improve. [Hollywood Reporter]

There's a new genre of fiction that's largely funded by the military and attempts to create hyper realistic predictions of the future. [Dirt]

Buy a $500k NFT so you can go to a mediocre warehouse party that doesn't even bother to check if you possess the NFT. This is the future. [The Verge]

The next generation of Jim Cramers aren't appearing on CNBC. They're on YouTube. [Bloomberg]

A decade ago, it was possible to have a YouTube channel with 1 million subscribers and still struggle to generate a full-time income. Today, a channel with as few as 70,000 subscribers can generate six figures. [Insider]