May 4, 2021
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When Tim Huelskamp and the 1440 team launched their newsletter in 2017, they built a product they wanted for themselves. As a busy professional working in venture capital, Huelskamp wanted a comprehensive, unbiased roundup of the day’s news. It would cover all sorts of verticals, from sports and entertainment to science and foreign policy, all in one place. He named it 1440 after the year the printing press was invented, an homage to the idea that newsletters could freely and easily distribute information.
At first, the newsletter started with 78 subscribers, just friends and family of Huelskamp and his co-founder. Today, 1440 Media has over 750,000 subscribers with an open rate above 50 percent.
How did they do it? Here, Huelskamp shares his advice for entrepreneurs starting their own newsletter businesses, and the strategies the 1440 team used to build the company. His answers have been lightly revised and edited.
How did you launch the 1440 newsletter?
“For the first quarter, we really just focused on the product. We didn’t worry about revenue, we didn’t worry about growth. We had a couple hundred subscribers, and it was growing organically every time we published, but we spent the entire summer asking, ‘How do we make this product as kick ass as possible?’ Because if you don’t do that, nothing else matters.
Once we figured that out—which took almost a year—then we focused on the channels and scaling the business and monetizing. Nothing matters without a great product.
The way this business model works, at its core, is with pretty simple unit economics. It’s a question of how expensive is it to acquire a customer, and then how much can you monetize from them every day. To keep it super simple, most folks make 2c to 5c off of an open. So if you’re spending $2 to acquire a customer on Facebook and you’re making 3c per open, that customer has to open your newsletter 66 times for you to break even. So if you have a 15 percent open rate and really poor retention (and if you have a 15 percent open rate then you will have really poor retention) your business won’t scale. The math won’t work.
So it all comes down to product: Learning what the customer wants and how you can add value to their lives. That’s what we really focused on at the beginning. We listened to our demographic every day, we responded to every email and we tried to get a little better every day.
Consumers have tons of choices: There are millions of newsletters, the NYT has free newsletters, there are hundreds of shows to watch. They have plenty of options. So how do you create the best experience possible so when they see your newsletter in their inbox, they open it? Without that consistent retention, the business model doesn’t work.”
What differentiates 1440’s newsletter as a product?
"I think it’s two things: Comprehensive and impartial.
We use the concept of ‘Jobs to be done’ which is an awesome product framework. For example, I read The Hustle every morning because I love learning about new business models and it is world class for that. I also read a lot of the Axios products. Pro Rata is the best newsletter out there for insights on who is raising capital and who is planning an IPO. It’s very deep on business—that is their 'job to be done.' There are a few hundred thousand finance enthusiasts who want to go that deep with Dan Primack every morning. But that’s a specific job.
Our job is: ‘I’m a busy mom, I’m a busy lawyer. I’m going to dive deeper on topics I care about in other newsletters, and on Twitter, but I just want quick hits across every industry in one place.’ We call it inch deep mile wide. That's our job to be done."
As a generalist newsletter, how do you approach acquiring new customers?
"We focus more on attitudes and how we can solve a problem rather than specific demographics. So for Facebook audiences, we’re not going after basketball enthusiasts like a basketball newsletter would, or fans of the LA Lakers. We’re going after folks that respond to specific targeting around what we can provide that they don’t currently have in their lives—across all the different verticals.
If you look at how we do advertising, it’s more, ‘Tired of impartial news? We’ve got your covered.’ Or, if you’re tired of feeling anxiety when you consume the news, and you just want to know what’s going on without everyone yelling at you on cable TV, and you want to learn really quickly in a lower stress environment, we’ve got you covered. So we approach attitudes rather than demographic information."
What have been your most successful customer acquisition channels?
"Word of mouth is our favorite one. (It’s everyone’s favorite.) That's users forwarding the newsletter to their friends and family. What’s great is these customers have significantly higher engagement than other acquisition channels. Word of mouth works really well for newsletters.
Next is other newsletters. We purchase ads in other newsletters, we also do cross promotion swaps with newsletters we read and love and want to share with our readers. The problem with the newsletter industry is it doesn’t scale as well. You can work with a partner and drive a few hundred sign ups with a cross promotion, but you can’t do that every day like you can on the big social platforms.
So we do Facebook and Instagram, and we test TikTok and Reddit and Twitter and Pintrest, but Facebook and Instagram are the best for us."
What is your No. 1 piece of advice for newsletter writers with 100 subscribers trying to get to 1,000?
"Stop thinking about growth and monetization. Just absolutely nail the customer experience. Listen to your customers. We live in this awesome world where your customers can email you right back.
Retailers who sell clothes to Macy’s don’t have any idea about what their customers are thinking when they choose to pick up a shirt off of a shelf. They don’t know why something catches a customer’s eye.
But if a reader emails you that they like your product, you can email them right back. You can ask them questions, you can try to get them on the phone.
Don’t worry about anything else. Just worry about creating a kick ass product and increasing retention and open rates. Until you have a 40 percent or higher open rate on your initial few hundred subscribers, I wouldn’t do anything else. Carve out a white space that doesn’t exist yet and focus on building the product."
And from 1,000 to 10,000?
"Understand why it is that your readers subscribe, and nail down how to describe that in a way that makes it easy to acquire new customers.
Why specifically do people read your newsletter? Then, be able to position that answer in a clear way on Facebook or in a cross promotion. Really understand how you can communicate your value proposition to a non-user."
Subscribe to 1440 here.
