Transcript

[Michael Houck]: I can see and hear you. What’s going on, man? What’s going on, buddy? How you doing? I’m good. I love the setup. [Hunter Hammonds]: You look like a podcaster now. Yeah, this is the home office, which is going away. I don’t know if you saw, we’re in the process of having a new HQ built out. Oh, nope. [Michael Houck]: No, I am suspended on X right now, so I’m not getting, my feet is all Like chaos and random viral crap like yeah, I’m not seeing the people I follow it right now. What’d you do you bad boy? I sent too many DMS asking people if they needed ghostwriting help and I guess I hit some limit and got flagged or something and Yeah, now I’m like deep into the world of black market telegram groups to get unbanned. [Hunter Hammonds]: So we’ll see Love it, dude. Love it it. Well, I’m curious how that journey goes. [Michael Houck]: Yeah, let’s either gonna get scammed 500 bucks, or I’ll get my username back. Well, we’ll find out. You know, I don’t know. [Hunter Hammonds]: Oh, hold on. You’re talking about those those groups or those people that are like, yeah, I got an inside like, yeah, yeah. [Michael Houck]: I look super sketch. But it’s 500 bucks. I figure the accounts worth a lot might as well be worth a shot on one of them. [Hunter Hammonds]: Well, I mean, that’s how they did it. Even before must spot it. There were those inside tracks, you know, so I would assume there’s still some validity to that. Just whether or not you’re in the right group. [Michael Houck]: Yeah, it could be if I find the right guy. And I think I found maybe the right guy. So we’ll find out next week. But being kind of annoying. What can you do? Yeah, man. Let me let me know. [Hunter Hammonds]: Because one of those guys who shouts me was like, Hey, do you want the username at Hunter? And it was like, You know, whatever. I was like, this is interesting. I never responded to him. [Michael Houck]: But if I I got works, I will. I’ll connect you for sure. [Hunter Hammonds]: Hell yeah, dude. Hell yeah. Well, what’s going on, man? Talk to me. [Michael Houck]: Talk to me about how the newsletter is doing. I mean, newsletter is fine. That’s we actually just signed a 20K sponsorship deal yesterday, which is nice. Always good when one of those hits. Watch the podcast. It’s going well. Yeah. The YouTube following now and getting, you know, the Spotify downloads and all that. Megaphone’s still growing, doing well. And the ghost writing agency now is also, also doing pretty well. I think by the end of the year, that’ll probably be our biggest revenue driver, actually. [UNKNOWN_SPEAKER]: Really? Okay, cool. [Michael Houck]: Yeah. Doing a lot of, a lot of Twitter, a lot of LinkedIn, some newsletters for folks, big companies and individuals. Too. So good mix. Hell yeah, dude. [Hunter Hammonds]: I love it. I love it. So I guess yeah, like talk to me, talk to me about newsletter growth and what you’ve been doing and how we might be able to collab. Like I’m, I’m all ears, man. I want to sit here like an idiot that knows nothing. [Michael Houck]: Yeah. I mean, it’s not super complicated. It’s just kind of tedious. Basically, if you send a bunch of emails that are the same from your any inbox on your domain, your own, a new one you set up, whatever, you’ll get flagged. First of all, the domain, the email sites like Gmail, Outlook, whatever else, ProtonMail, all those, you’ll go into the spam filter and the promotions folder very, very quickly if you just start sending out the same copy. Even if you vary the copy manually, you’re not going to be able to scale it up to the point where it makes meaningful results for your business in terms of number of leads or number of newsletter subscribers. And so there’s also then this layer of blacklists that like will basically they’re like a trusted intermediary between the Gmails of the world and the like senders of the world. And if you get late, if you land on some of those blacklists, then the whole domain can get fucked. And so that’s why people will set up separate domains to run cold email campaigns. And then there’s like certain rules about when you set up those domains, you know, you should only set up two inboxes on the domain. You need to warm up them by sending emails and like warming pools back and forth for two weeks before you even start sending campaigns out because they get signals that, Oh, this is a real inbox. It’s getting opens. It’s getting replies from these like bot inboxes basically. So you warm it up for two weeks and then you can start sending, but if you’re only doing two inboxes, for one domain, you’re not going to be able to get to the scale of emails per day that you need in order to drive results because each inbox can only realistically send like 30 to max 50 emails per day, you know, randomized throughout the day. And so what people do is they, I mean, you might know this, so stop me if you, if you do, but what people do is they buy a large number of inboxes or a large number of domains that are very similar to their So for example, I have like, try Megaphone, get Megaphone, join Megaphone, you know, .com, whatever. And on each one of those, they do the two inbox thing. So for each domain, they’re sending 60 emails per day, 30 from each of the two inboxes. And if you have a big enough lead list, and that lead list is highly targeted, after spending the two weeks or so warming up the domains, you can all of a sudden turn on a really big drip of getting your brand in front of people. And if you if you’re writing compelling copy in those emails and you’re giving people reason to reply in the sub or to open in the subject line and then to maybe reply to the email itself by offering some lead magnet or something like that, you can actually keep those domains and those inboxes working for long enough where you don’t need to constantly be churning them out by getting like tagged on blacklists and stuff like Right. That’s what we’ve set up where, you know, for, we do it for a couple of SAS clients. We do it for high ticket agency clients. Um, and we do it for newsletter clients as well, where basically the client comes up with some lead magnet and we help ideate that if they want us to. Um, and then we work on securing the leads. We have like a scraping engineer on our team who can tie any social media account to LinkedIn basically and grab lists of people who are engaged with that social media account and some other things that he does. And we provide the lead lists, we set up the inboxes, we manage the campaigns, we write the copy. Oh, and the other thing about the copy that you need to do is you can’t, even if you do all this, you can’t just send the same copy because it’ll still get flagged. So you need to do what’s called which is basically varying little pieces of the email. So like instead of saying like, hey Hunter, I would say, hey Hunter to one person, hello Hunter to the other person. And you do this at like 10 or 12 different points throughout the email. That way there’s no variations going out that you completely evade blacklist and spam filters and things like that. So yeah, so that’s part of what we do. And then basically if the person person, if the people getting the emails are opening or engaging with a high enough percentage of them, then we just, in this case, would add them to the Beehive account and upload, and they’d get some custom welcome sequence. [Hunter Hammonds]: This sounds though, I mean, this sounds more sales oriented versus like newsletter, right? [Michael Houck]: Yes, it is more traditionally a sales thing. A lot of SaaS companies do it. A lot of, as I said, high ticket agencies do it. Doing it for ghostwriting and it converts well for that. But the thing is, it’s the economics are so good that it also is like a vastly underrated channel for newsletters. So paid ads, you know, even if you’re running a lead magnet ad, where you’re going to get the lowest CPA, but the lowest CPA and the lowest engagement with your actual newsletter after the fact, you’re just optimizing for lowest CPA with lead magnets, you’re going to to get like, You know. Crazy outlier case scenario like three or four standard deviations above the mean would be like $1. Most people more like 150 to 170 and then like I'd say like the true average probably go around $2. Per subscriber with cold email. Because you’re already in people’s inboxes and because you can get them to open these emails and they’re get familiar with you. You can acquire subscribers for in that $1 to 150 range. And then also they're more engaged with the emails than you would be with a lead magnet ad on social media. Because again, you're already in their inbox. They're already sort of knowing you. They're not signing up just for the lead magnet. They're signing up because they're opening, or we're signing them up because they're opening your emails. So we consistently see open rates from this cohort like 60 to 70% range, sometimes even higher. And click rates are comparable, if not a little bit better than paid social media ads too. [Hunter Hammonds]: Okay, interesting, interesting. So I guess for me, like, the newsletter that we're starting with, and we'll evolve from it later, but the newsletter we're starting with is this We Can Design, you know, just a weekly design drop newsletter. I guess my question is like, that's pretty targeted to designers, right? Or the creative community in general, which is big, but it's a little tough for me. I mean, I'm sure I could sit down and imagine, but it's a little tough for me to think about like essentially like getting leadless or doing cold outreach campaign to grow that in particular. I don't know. Like, what do you, to me, it seems like the, the biggest lifts would be something like, obviously, you know, paid acquisition, you know, looking into boosts or spark loop type things, you know, doing simple giveaways for designers. Like how many fucking thousand subscribers do you think I could get if I gave away a MacBook Pro, for example, you know what I mean? Like little things like that is kind of where our heads have been. [UNKNOWN_SPEAKER]: Yeah. [Michael Houck]: I mean, Personally, between you and me, I would avoid like behind boosts and spark loop and all that stuff. We wasted time. I was bullish on it because at first the open rates were really good from those those cohorts, but the engagement was so low that they didn't click for advertisers. They didn't buy our products. They just were these like newsletter tourists who were opening. You know they signed up for some other newsletter. Ours got tagged on so they're like actively newsletter people. But they don't actually care about us. So the second-order effects just weren't there. So we stopped doing that entirely near the end of last year and haven't gone back to it this year at all. So personally, I would avoid that. What we recommend to people now is a mix of paid social media ads, content marketing on your own social accounts, and cold email. And I think a lot of people don't do that third step. I don't know if there's the scale can be much larger for cheaper than like the content marketing, giving away a laptop or something like that could be. Yeah. [UNKNOWN_SPEAKER]: Interesting. [Hunter Hammonds]: Okay, so what was so I mean, based on what you're seeing, what would you recommend in terms of kind of going about growth? Like, let's say, let's say we're at 3000 subscribers, right? Say 3,000 subscribers, 60% open rate, 20% click-through rate. And when I just like speed run to like 10,000. Yeah, I mean, I'd do three things. [Michael Houck]: I would, first thing I would do is I'd create some lead magnets, right? I don't know if you guys have like design focused lead magnets, like uses a hundred templates for your Figma designs or whatever. I'd come up with something, yeah. I'd create like two, three, maybe four lead magnets and then, I'd run those, first thing I'd do is I'd post those on social, probably from the account with the biggest followers related to design, so maybe that's your account, maybe that's an off-menu account, I don't know. But I'd post that, I would, I don't know if you've seen the format of those lead magnet posts, I'm sure you have, where it's like comment or repost or whatever to get a DM, and then you DM them the link to the card signup page, drop their email, they get the lead magnet. I would use megaphone to boost those posts, uh, get as much attention on them as possible. Um, we did that when we had nine or 10,000 subscribers, I ran five lead magnets across six weeks, uh, one post each on X and LinkedIn. And we got 25,000 got from nine to 10 to 25,000 subscribers from it in those six weeks. So that works. Um, I don't know if it works as well anymore, because a lot of people do it, and that was like two years ago or a year and a half ago we were doing it. But I'm sure you'd still get some subscribers from it. Then, after the election, I would start running paid social media ads. Don't do it before then, your CPAs are gonna be too high. And I would use those same lead magnets. If the goal is just to get subscribers, then I would say run lead magnet-focused ads, because your CPA will be the lowest. If you want people to be more engaged with the newsletter, then maybe come up with, you know, look at the ad libraries of, you know, Sahel's newsletter, other people's newsletters, and just borrow those creatives and, you know, apply the brand to it. And then the third thing I would do in the meantime is start warming up domains to run some code email campaigns for those same lead magnets. And I'd get a list of designers, maybe like junior designers or designers or people who are just interested in becoming designers. I don't know what the target of the newsletter is, but whatever that cohort is, I would just get a lead list, write some copy for it and set up a campaign to start in two weeks. [Hunter Hammonds]: So basically around the same time that the paid ads would get started. Makes sense. And what would you do with like all of, like we're sitting on, I don't know, we're sitting on a few thousand emails of, of leads. That we've had over time, like mainly some for off menu, some for some of our other brands that were sitting on like a few thousand emails that have been like debounced and cleaned. Like, what would you do with those? Would you import those as a segment or just not even touch that? [Michael Houck]: Yeah, throw them in there, man. They've given you their email. This is a marketing communication from the brand that they've given you. So there's nothing illicit about that. [Hunter Hammonds]: What if, what if, for example, though, like, I guess let's say, let's imagine even just let's say there are 3000 emails. And let's say 1000 were from the viral cuts, video editing 1000 for we're from off menu, for example, whatever. And then we see a lot of like unsubs from the viral cuts cohort. Like, you think that would affect things? [Michael Houck]: Yeah, I wouldn't import it because you guys had set up where, you know, you these are different companies, effectively, they're different. They're not just different brands, they have different teams behind them. I don't know if they still do do, but before it was, it was more, yeah, it's, it's one umbrella, but yeah. But yeah, I mean, as far as like the end users concerned, like if they're signing up for interest in viral cuts, they're not signing up for interest in off menu. So I wouldn't upload the ones that were not design related. Um, cause yeah, the more unsubscribes you get, the more spam reports you get, the more your deliverability is going to get impacted. And the harder it is for you to show up in people's like primary folders on their email. [UNKNOWN_SPEAKER]: Yeah. Okay. [Michael Houck]: If it's 1500, then I would just start with this. This 1500. [UNKNOWN_SPEAKER]: Okay. [Hunter Hammonds]: Makes sense. And how are you liking BHAB, by the way? Yeah, no complaints. [Michael Houck]: Is great. Makes it really easy. We sent three emails a week now. So we're in there all the time. So yeah, I couldn't be happier with it, honestly. It has all the features, and they're always adding more. And they're very responsive. And the UI is just easy to use, the UI UX. Yeah, makes sense. [Hunter Hammonds]: Yeah, it's been fine so far. We're doing a partnership with Kit. I think in our space, like, Kit Studios will live in our space. They're a Chicago one. So that's a little interesting. I'm like, well, I, I don't, I don't have a dog in this way. Like it was already on beehive when we bought it. So I'm like, fuck it. [Michael Houck]: We'll migrate it to kit. I don't really care. Um, but yeah. I mean, I'm a, I'm, I'm biased cause I, I've invested in beehive, um, as a friend, but, um, yeah, I mean, look, it's a product being built in the 2020s by a team who built Morning Roo versus a product that was built in the 2010s. You know that's yeah that's my perspective. [Hunter Hammonds]: I feel it I feel it for sure. Cool so what I mean what kind of budget or have you I guess so for us like the long tail strategy here is that we're going all in on content. So you know obviously off menus doing this we can design now we're going to create a full on like design publication like full fucking media brand right. The goal for us there is that off-menu started to build software for designers. Now, we're not talking like Figma. We're more so looking at like what are like very niche, but very prevalent problems. So for example, off-menu has built a plugin that basically allows a designer to say, let me select these four art boards and click two buttons. And I've instantly got like a bento grid to share or a case study, like rendered out, like really, really cool shit. So we'll be releasing a lot of that stuff. And so obviously building, you know, the media brand for design serves as a distribution engine for a lot of that stuff. And we're trying to be very careful about how we communicate all that. So for me, I think I'm willing to spend the dollars on growth, but I'm probably less interested right now in taking on sponsorship revenue. I don't know. Um, but I know the last time we talked to you, you were at like 60, 70,000 subscribers. And I think you said you were doing like 40 K a month on the newsletter from sponsorships and stuff. Um, I guess talk me through how you've looked at like the economics a little bit. And like, if you were me and again, you're like trying to speed run to 10,000, how much are you spending? How are you thinking about, you know, kind of recouping that investment, things like that. [UNKNOWN_SPEAKER]: Yeah. [Michael Houck]: I mean, look, the market is different for sponsors. Than it was I think last time when we met up in New York. We're still doing on average 25 to 30K a month in sponsors, but a lot of people are doing way less than that. Like the market is way down. And the reason for this is because in my opinion, Beehive's ad network has really taken off. And so a lot of sponsors, even smaller ones that we worked with in the past are now going to Beehive you know, rather than paying at a flat CPM for something that I don't know how it's going to perform, I'm going to go through Beehive and have it be totally click based. I'll pay only for the clicks and the prices that they're offering are like very, very low. But it has all these long tail newsletters with, you know, 1000 subscribers that can offer that are fine to take any money for it. And so newsletters that are more established or more brand focused, are having to negotiate more with these brands and some brands are just not interested at all in anything other than the ad network. I think that problem's going to keep getting worse. Beehive just launched CPMs as well, but again, the rates are just so low that it's more targeted towards like helping anyone earn a dollar from their newsletter rather than the bigger players. So we have months where we're doing we have months where we're doing 20, we have months in the middle. So I would say, especially for a newer newsletter, don't count on sponsorship dollars as much. What you guys should be doing, what we started to do more of as well, is pitching our own products and services in the ad slot for the newsletter. And that's been good, that's been positive ROI, That's been solid. And so, yeah, I would say think about that. In terms of how much to spend on growth, I mean, that's a budget question for you guys. I've seen people who are spending still tens of thousands of dollars a month on paid ads alone. I've seen people who are doing the mix of paid ads and cold email. So it really comes down to what your guys' budget is. But in terms of recouping it, you can recoup some of it through the Beehive Boost spark loops of the world if you wanna add that step after people sign up. But in my experience, you're probably better off just showing people your offer on the thank you page rather than trying to get a buck from them by having them subscribe to some other newsletter. [Hunter Hammonds]: And when you say thank you page, you're referring to the thank you page after the subscribe? [Michael Houck]: Yeah, so the landing page, sign up, where they get redirected to once they put their email in. You can have the SparkLoop widget show up on any webpage. You can have the Beehive Boost widget show up on any webpage, but then they have to manually click out of that to see your offer, and some people just click out of the page entirely, so probably better to show [Hunter Hammonds]: the offer. Okay, makes sense, makes sense, okay. All right, I think that checks out. I mean, yeah, it sounds like long story short, just I'm going to, I'm going to sit and think about the, the cold outreach strategy. I like it. Um, but I want to think about it. Um, but otherwise, you know, having a few good lead magnets and then running paid ads against those seems to be the winner after the election. [Michael Houck]: Yeah. Don't do it before the election. Um, lead magnets in general, obviously super useful. For newsletters. Also, you can do like a quiz, you know, like this quiz. And at the end, you present them with at the end, you collect their email, and then you present them with their offer, aka their results. And it's, it's, you know, one plan that you guys offer. So yeah. [Hunter Hammonds]: Have you had so you've had success during the quizzes? [Michael Houck]: Yeah, we haven't done it for my newsletter yet. But we're actively for our, we have another newsletter called Viral Examples, basically share templates for viral content each week. And so we're gonna start doing it for that one and direct people to the ghost shredding offer. [Hunter Hammonds]: Oh, swick. I love that. I love that. Okay, cool. And have you ever tried giveaways? [Michael Houck]: I don't love giveaways because they're even, like you can get a lot of subscribers from them, but they're even lower intent than lead magnet subscribers really don't care about the newsletter at all. They just want a chance to win the raffle. You know, yeah, yeah. I'm still gonna try it. [Hunter Hammonds]: I mean, if you want to give away a laptop, be like, Hey, I gave away a laptop. [Michael Houck]: Go for it. [Hunter Hammonds]: I would just say we're probably gonna do something simpler than that partner with a friend or something. Yeah, I mean, it's funny, because, you know, I think you and I operate a lot of the same ways. It's always good to have friends that you can talk to and learn from, but then also you're like, all right, I listened to everything you just said, now I'm gonna go test all of it and then see what works in my situation. [Michael Houck]: So I gotta get slapped in the face and gather some data. As you should, man. Yeah, let me know, we're here, happy to help, but either way, support you guys and wanna see the design brand for the future, yeah, come on, take the crown. Hell yeah, dude. [Hunter Hammonds]: All right, last question. So on this cold email front, have you guys been helping out with anybody from a sales perspective? [Michael Houck]: Yeah, we do it for sales too. [Hunter Hammonds]: All right, because we're just now spinning these efforts up for Landed. [Michael Houck]: Sorry, my engineers are slacking me. [Hunter Hammonds]: We're spinning these efforts up for Landed. So I'm highly interested in cold outreach for Landed. At scale, right? You know, he's done cold outreach. [Michael Houck]: Different people about cold email, say different levels of scale. [UNKNOWN_SPEAKER]: 1000 a month. Oh, yeah, that's easy. That's easy. [Michael Houck]: Probably 1000 a month, like 1000, like really good. [Hunter Hammonds]: A month, I think is probably the goal for us because out of that I'm expecting to turn 1% into, you know, warm leads. Yeah, for sure. And that's, that's about the right volume for us. We'd get we'd get open rates. [Michael Houck]: We'd probably be able to get open rates. Well, actually, it's better if you don't track open rates for cold email. This is like, we can track it if you want. And we could probably get it in like the, you know, 70 80% range, some 8%. But it's actually better if we don't track it because we don't want any HTML in the emails that we send better for delivery. [Hunter Hammonds]: Yeah. And talk to me through how your all's model works for that and what pricing looks like for those things. [Michael Houck]: Yeah. So, um, depends on volume basically on if you want a thousand a month, um, I need to look and see for this niche, how hard it is to get the right leads. Like, is this like CEOs, is this like, you know, I don't know. [Hunter Hammonds]: We need to talk about that. It's like marketing directors, heads of marketing. Um, generally anybody in like a decision making or hiring, uh, position on a marketing team for like small to mid market size companies. [Michael Houck]: Okay. That shouldn't be too challenging then. Uh, don't, don't quote me on that, but it should be too hard. So, uh, a thousand a month in terms of delivered, uh, Yeah, we could probably do it for about 150 per subscriber. If we would scale that up, that number would come down. And so that'd be yeah, about 1500 a month. And that includes copywriting, that includes getting the leads that includes managing the inboxes and the domains. And you know, maintaining deliverability. [Hunter Hammonds]: Okay, yeah, let me let me come back to you. Next next week on that and see if we can put together a solution to try some cold outreach there. [Michael Houck]: Cool. [Hunter Hammonds]: Yeah, sounds good, man. I think, let me ask you this real quick. On that front for cold outreach, one of the things that we've been tinkering with is like, A, what do the lead magnets look like in that regard? But what's another organic way to get in front of marketers. I don't know if you've seen this, but I don't know if that's like even the right, no, that is the right domain. [UNKNOWN_SPEAKER]: Okay. [Michael Houck]: Did you send something? [Hunter Hammonds]: Yeah, I sent it in the chat for Zoom. Did not come through. Oh, that was weird. Hold on. It sent it to your recorder. There you go. [UNKNOWN_SPEAKER]: Okay. [Michael Houck]: Let's see. [Hunter Hammonds]: So I've even looked at like, maybe I acquire a newsletter like this. That's new, but growing. But it's just fucking, it's marketing headlines. Right. And this is just a super easy, organic way to build that list. And then just kind of keep putting landed in front of that segment. It'd be an interesting approach for us. [Michael Houck]: This is super simple. Super cool. I like it. It's also beautifully designed the web page. [Hunter Hammonds]: Yeah, my buddy Ryan built it the guy that owns workspaces. Let me ask you this, because you've so you I've acquired one newsletter, you've acquired a couple now. This one's a tough one because it's brand new. It's like a month old has about 1000 subscribers, what would you pay for something like this? [Michael Houck]: Are the subscribers US based? [Hunter Hammonds]: Yeah, predominantly. What's the open and click rate? 60%, 20% probably. I can find out. [Michael Houck]: It's just, it's so small. I'd probably only be willing to pay like max 2K. I mean, you get the brand, I guess. Yeah. That's the thing is it's just so small. [Hunter Hammonds]: It's just so small. [Michael Houck]: Like you could, you could replicate it. In like a week or two if you wanted to. Even faster, yeah. Yeah, even faster. Yeah, so I definitely wouldn't go over like $2 a subscriber. I’d probably try to get it for closer to one to 150. We paid in the one to 150 range for both of the newsletters that we acquired. We just, we wanted them just for the email list they were highly related to our niche, and we just said, let’s throw in our letter. [Hunter Hammonds]: Wouldn’t recommend that. Two from Jaisal or? [Michael Houck]: But one from Jaisal and one from this other guy named Matt. But yeah, wouldn’t recommend it. I would only recommend it if you’re going to keep the brand going. They just didn’t. The same thing as the sparkly people. They just didn’t care about our products. They didn’t stick around that long. We have like maybe 50 of them still subscribed a year later. So it’s not worth it. But if you’re going to keep the brand going and just take it over, basically, that’s a different story. And then probably pay up closer to two. Yeah, that’s about right. [Hunter Hammonds]: Yeah. Okay, cool. All right, man. I know we’re at time and you and I both have a bunch of shit to do. Dude, this was great. I appreciate the time. I’m going to book the time for us to do the podcast. I’m also going to be starting one for This Week in Design that’s going to be like very design focused. So if you think that there’s something interesting that like an interesting conversation we could have that’s related to design and startup growth, things like that, that can be really cool. But other than that, I’ll reach back out next week and we’ll have a conversation about some cold email stuff for Landed. [UNKNOWN_SPEAKER]: Cool. [Michael Houck]: Sounds good, dude. I’ll shoot you an email with just the pricing just so you have it, but sounds good. [Hunter Hammonds]: Perfect. Awesome. See you, buddy. [Michael Houck]: See you, man.