Interview Date: August 20, 2023
Table of Content
CREATOR INTERVIEW
As if it is not challenging enough to build a single newsletter, Richard Patey established a newsletter network with 6 newsletters and created a flywheel by enabling each publication to support others’ growth. What a great idea!
First, he consolidated from 6 to 3 newsletters.
Then, he sold 2 of them successfully.
After the acquisiton, he still runs 3 newsletters, including Digital Asset Investor that he still owns.
Today we talked about the behind-the-scenes of how he manages all these processes above and his current strategy to run Digital Asset Investor.
In Digital Asset Investor, each week he shares the top news and opportunities in digital media, domains and crypto with over 5,000 subscribers. He’s not in a rush to hit the next milestone. He focuses on building a sustainable business via an engaged and loyal audience.
As an experienced website builder, Richard defines newsletters as “defensable businesses where you own your audience and your traffic can’t be taken away.” During our conversation he also shared more about on why newsletters are valuable assets and why he started to sleep well at night after focusing on newsletter business!
Let’s dive in!
NEWSLETTER IDENTITY CARD
TOOL STACK
- ESP → Beehiiv
- Growth → Beehiiv, Swapstack
- Sponsorship → Passionfroot
- Outbound reach → sales.co
- Payment → Stripe & Paypal
MEET THE CREATOR
Welcome Richard. Let’s start with getting to know you.
Hey, thanks Ciler! I started out in online entrepreneurship back in 2010 doing SEO for clients before starting to build and sell my own content sites. My first significant exit was selling a software review site in 2017, and then I started to create media properties such as a podcast and Facebook group called Flipping Websites, which I sold in 2019.
Then in 2020, I was early to Substack and created the first editorial newsletter in my space, the Website Investing publication, which I built up to $5K MRR and an equal amount from sponsorship/affiliate and sold for six figures to Travis Jamison where we turned it into investing.io.
In late 2021 I created the Alts Cafe newsletter and Discord community, which Flippa acquired in 2022 and I spent 6 months working there.
I then left to launch Acquire Websites on Substack, and then quickly launched another 5 publications, so for a while, I was publishing a different newsletter 6 days week! I wanted to see what it was like to build and run a newsletter network:
Even though I was getting writers to help me I found this workload was not sustainable for me! Fortunately, I decided to move to Beehiiv for its growth features, which limited me to three newsletters per account. So I consolidated down, renamed and ended up with:
I recently sold the first two above to Scott Oldford at Wisdom Media and joined the media rollup there, where I’m helping with newsletters.co, duuce.com (the #1 newsletter marketplace) and sponsorships.com.
How many newsletters do you run currently? Can you share how they perform?
I’m still operating three newsletters, post the Wisdom Media acquisition, but now I only own my Digital Asset Investor.
Here are the metrics for each newsletter:
Newsletter Creator:
START
Why and how did you decide to start Digital Asset Investor in the first place?
I needed an editorial newsletter in order to teach The Newsletter Is The Business product I created on Gumroad!
And also writing a weekly investing newsletter forces me to keep up to date with the assets I’m most interested in.
GROWTH
By running multiple newsletters, you created a flywheel. How did you manage this flywheel work?
I always made sure that each newsletter recommended as many others as possible, both within each send and within the recommendations engine/features of both Substack and Beehiiv.
At some point, you decided to consolidate from 6 to 3 newsletters. How did you manage this process? What was the impact of the consolidation on key metrics?
I was forced to consolidate from 6 to 3 as needed to move to Beehiiv, which has a 3 per-account limit. This was a great thing as I was able to import engaged subscribers from multiple different publications and start from a place of strength. In total, I remember having 10K subscribers in Substack but there was obviously overlap between the publications. I got down to about 6K when I moved to Beehiiv.
I simply managed the process by telling my subscribers that you’ll be hearing from me next from a subdomain on Beehiiv.
I didn’t encounter a drop in open rates, but the unsubscribe rate jacked up to 5% for a month or so before dropping back down to 1%.
After switching to Beehiiv, how did the flywheel mechanism evolve?
I still cross-promote whenever it’s natural to, as well as within the recommendations on Beehiiv.
But I actually get more of a flywheel going now by niching down and getting other people’s newsletters to cross-promote, as you can see on my recommendation pages, with a focus on crypto / web3.
How did you gain your first 1000 subscribers?
I’ve always maintained a personal list of 1K subscribers that I seed any new newsletter with, which I did with my first Substack, through to Revue and now to Beehiiv. You could call these my 1000 true fans!
Which growth channels do you mainly use?
As I’m only making a small amount of paid acquisition (my budget on Swapstack is $1K/m and I’m putting in ~ $500/m into Beehiiv boosts), the majority of my new subscribers come from free recommendations and organically from my X.
I’ve also been trying to rank my personal site for a bunch of newsletter, website and NFT content but Google is still treating it as linked to investing.io, where it had been redirected for the last two years!
What are the most effective growth strategy & channels?
In terms of organic, recommendations have been the most effective for me. For example, Acquire Websites (when it was on Substack) received over 700 recommendations:
What is your strategy to keep open and click rates higher?
To keep open rates high, you need to regularly remove inactive subscribers – I wrote a post about how I removed 1300 subscribers from my investing newsletter which was 30% at the time!
You can manipulate click rates through the structure of your emails and Jaisal Rathee, who you interviewed, is the best I’ve seen at this. He consistently achieves 15% CTRs, sometimes as high as 25%, through short emails, where each story is one or two sentences at most with a link to click.
👉 Ciler’s note: You can read the full interview with Jaisal Rathee here.
You’re an expert on creating funnels. Can you share the best working funnel you created for your newsletter and how it works?
I went deep into funnels in 2016, when was early to Clickfunnels and created a productized funnel business building out marketing, sales and e-commerce funnels for customers.
With newsletters, outside of creating lead magnets (which I don’t do as I think this can lead to low-quality subs that don’t engage), the flow is simply:
Landing page > paid recommendations > Thank You Page with a tripwire product offer > Upsell.
I detail what this looks like over at newsletters.co for my investing newsletter, where new subscribers get shown a $17 product (I’ve experimented with $7, $27, and $47 with these) and then get hit with a $147 upsell at a $50 discount (one time offer). These Gumroad products have brought in five figures in revenue so far.
What are your plans to continue growing?
Just carry on what I’m doing now, and focus on building an engaged audience. I’m in no rush to get to the next milestones, i.e. I could get from 5K to 10K subs this month if I spent enough and didn’t care about the quality of the subscriber. I’m in a great position to capitalize on the next crypto bull run, which will bring in a lot of people and a lot of sponsorship revenue; until then, I’ll just keep ticking up.
Regarding growth efforts, what would you do differently if you had a chance to start over?
I wouldn’t do anything differently. From trading crypto, I know what an unsustainable pump looks like and the same applies to your subscriber graph.
“This game is more about maintaining your subscriber base.”
MONETIZATION
How do you monetize your newsletters?
Prior to the acquisition by Wisdom Media, all three of my newsletters were averaging ~$8K/m revenue in total, from sponsorships, affiliate income and my own products.
How do you manage the sponsorship process?
I use Passionfroot to manage sponsorships, where I sell packages for my personal newsletter (as well as for Wisdom Media).
I’m also using Sales.co to do outbound sales to find suitable sponsors, as well as my own outreach.
ACQUISITION
As you already mentioned in the beginning, two of your newsletters are acquired by Wisdom Media.
How did it happen?
I first connected with Scott Oldford when I was managing sponsorship for investing.io (a service I launched at acquire.gg) over a year ago now and stayed in touch with him over Telegram since. I was excited about the media rollup he was building and proposed that two of my newsletters would be a good fit, and that I could could help build the sponsorship process internally, as well as offer strategy and advisory.
How did you make the valuation?
We simply agreed on a valuation based on the number of opens and on the profit I’d been generating. We signed an agreement back in May for a 12 month contract where I continue to operate the newsletters, and help with the transition and training for the take over.
E-MAIL SERVICE PROVIDER
You started on Substack and switched to Beehiiv when you launched your 6th newsletter. Why did you switch?
I switched to Beehiiv as it is pro ads, and it unlocked growth levers that I didn’t have on Substack, such as a referral engine, great analytics so you know where subscribers are coming from and most importantly a customized subscribe flow where you can send people to a page post optin. I give 11 reasons in my Beehiiv vs. Substack post on my personal site.
SYSTEM & PRODUCTIVITY
What is your weekly system?
I publish on Monday, Wednesday and Friday, which is a lot easier than Monday through Saturday when I had 6! I find the writing process enjoyable, so it’s not a grind.
NEWSLETTER EXPERIENCE
How did running newsletters contribute to your life professionally & personally?
I’ve made way more great contacts and friends who have newsletters than I ever did with websites, where people tend not to share their URLs for fear of having their niche copied or negative SEO.
And I sleep well at night knowing that Google can’t take away 50% of my traffic and revenue overnight in an algo update.
What is the most challenging part of writing a newsletter and how do you handle it?
Writing is my best skill so I find publishing easy rather than challenging, but also I’ve been sending at least one email a week for over a decade now, from before newsletter businesses were a thing and I was sending personal updates with links to blog posts I had written. It’s a muscle and habit I’ve built up.
FUTURE
What is next on your newsletter journey?
A couple of weeks ago, I launched LetterOperators.com as had people asking me if I knew anyone who could launch or take over the operations of their newsletter.
I also think that professional newsletter operators are required for newsletter businesses to become a true asset class. There’s been a lot more interest than I expected and I’ve realized that there is a gap in the newsletter agency market which I’m going to fill.
RECOMMENDATIONS
What would it be if you had the right to give one piece of advice to aspiring newsletter creators?
There’s no need to aspire, Beehiiv has a free plan, just pick a niche that you know most about, or want to learn about, and get writing. You can always pivot. And you can make money from month one by applying to boost other people’s newsletters.
What are your favorite newsletters that you can’t wait for the next issue?
This is a great question. I’m obviously subscribed to several hundred newsletters, but 99% get dragged into the promotions tab otherwise, I’d never achieve inbox zero. Ones that I always open are:
FINAL WORDS
Some people are asking whether we are in a newsletter bubble, but I see it in a similar place to where buying and selling websites was back in 2013, when I used to listen to the Empire Flippers podcast. 10 years on and website investing is an established asset class with funds such as WebStreet and Domain Magnate and professional operators.
“I think the newsletter industry will not only 10x from here, but it will take market share away from content sites. It’s a better, more defensible business model where you can stack more revenue channels, and it’s not at risk from being disrupted by AI and Google’s own SGE.”
Where to find Richard Patey and his work
Visit “Digital Asset Investor”
- Other Newsletters → Acquire The Web & Creator Funnel
- Richard Patey X
- Richard Patey LinkedIn
- Digital products – Gumroad
- The Newsletter Is The Business
- LetterOperators
3 Popular Issues from Digital Asset Investor
- Digital Media Mogul “This week I discuss how to become a digital real estate mogul, domains ‘with content’ and how going $BALD made someone a million.”
- Letter Operators “This week I discuss newsletter operators as a service, Unstoppable Domains selling .sats, and why I’m betting on Solana Pay”.”
- “Content Websites Are Dead” “This week I discuss digital magazines (i.e. newsletters) replacing content sites, a two-word crypto .com and Opepen NFT for the culture.”
